A 2011 inspection conducted for a supplier to Wal-Mart Stores Inc. found serious fire-safety concerns at a clothing factory outside Dhaka, Bangladesh, that burned down last month, killing 112 people, according to documents reviewed by The Wall Street Journal.

Yet just weeks before the fire, a majority of the factory's assembly lines were devoted to production for Wal-Mart, according to documents found by the Journal at the wrecked factory. Sand-colored girls' shorts bearing Wal-Mart's Faded Glory label also were found at the charred factory by the Journal.

Wal-Mart declined to comment about fire-safety concerns at the factory, Tazreen Fashions Ltd. A Wal-Mart spokesman said Tazreen was removed from the retailer's list of authorized factories "months ago" but declined to be more precise or say if the retailer notified its suppliers. Wal-Mart said a supplier sent garments to Tazreen without authorization and that the retailer is investigating if others did.

The factory's owner, Delwar Hossain, couldn't be reached for comment about the deauthorization. He has said before that audits carried out for Wal-Mart didn't raise fire-safety issues at the factory.

The fire has focused attention on apparent lapses in efforts by Western retailers over the last several years to improve conditions for workers that make clothing in emerging-market factories.

In Bangladesh and elsewhere, Wal-Mart and other major retailers have mechanisms to audit and approve factories to ensure that their suppliers obtain clothing from manufacturers that are safe and don't employ child labor.

But the nature of the system means warning signs often are overlooked, experts and labor groups said. The retailers' monitoring typically is conducted by third parties and paid for by suppliers, rather than by the retailers. Wal-Mart's Standards for Suppliers manual says suppliers are required to disclose which factories they use.

When problems are identified or a factory is removed from a supplier's approved list, the news might not be communicated to other suppliers or to the factories themselves, according to interviews with executives in the industry.

In Bangladesh, even though one supplier stopped using Tazreen Fashions in the wake of fire-safety concerns last year, other suppliers continued to use the factory, according to interviews with Tazreen executives and documents reviewed by the Journal. It was unclear why the suppliers continued to use the factory.

A May 2011 inspection of Tazreen Fashions was carried out for a Wal-Mart supplier, Canada's NTD Apparel Inc., according to documents found at the factory and on the website of Tuba Group, Tazreen's parent company. The firm that conducted the inspection wasn't named.

The inspection found that exits and stairwells at the factory were blocked, workers were unaware of evacuation routes and the factory lacked some firefighting equipment, according to documents found at the factory by the Journal. The documents said Tuba Group promised to make corrections by the end of June 2011.

STR Responsible Sourcing, part of U.S.-based UL LLC, carried out a follow-up inspection last December, a cover page found at the factory showed. The pages laying out the findings of that visit were missing. UL, which acquired STR last year, didn't respond to requests for comment on the audit.

It was unclear if any of the fire-safety deficiencies were addressed.

Michael Eliesen, president of NTD Apparel, said by email that Tazreen Fashions was "delisted" in March as an approved manufacturer and that Tazreen wasn't doing NTD work at the time of the fire.

Jahangir Alam, an officer for ethical sourcing at Wal-Mart's office in Dhaka until late last year, said controlling the supply chain to ensure compliance with ethical sourcing standards was a challenge. "With multiple subcontracts going on, it has become almost impossible for buyers to practice ethical sourcing in the true sense," he said.

Wal-Mart's Dhaka office hadn't been closely involved in auditing at factories where its suppliers obtained products, Mr. Alam said. That changed after a 2010 fire that killed 21 people at a factory near Dhaka. Now, he said, "the local office keeps an eye on all the factories producing Wal-Mart labels."

The current audit manager for Wal-Mart's Dhaka office declined to comment on whether his department had played a role in removing Tazreen's authorization and why Wal-Mart merchandise was produced there after the deauthorization.

Wal-Mart said a supplier, which the retailer declined to name, used Tazreen in violation of the U.S. company's rules and that the supplier has been terminated. "If we determine that other suppliers were using a deactivated factory to produce merchandise for Wal-Mart, that's a violation of our supplier standards," said Wal-Mart spokesman Kevin Gardner. "If that is the case, it is unacceptable and we will take appropriate action."

A lack of proper fire-safety precautions has been cited by Bangladeshi officials as a reason that so many people died when the Tazreen factory caught fire Nov. 24. Some people jumped to their deaths from upper floors of the factory because stairwells were engulfed in flame and smoke. The fire escape was inside the building and, like the main staircase, led to the ground floor, where burning balls of yarn blocked the way.

Mahbub Rahman, a marketing employee at Tazreen parent Tuba Group said Wal-Mart hadn't sent his firm documentation saying that Tazreen no longer was authorized to produce clothes for the retailer. He said the first that the company heard that Tazreen had been deauthorized by Wal-Mart was in newspaper articles after the fire.

Wal-Mart declined to explain how it alerts suppliers or a factory when it has been barred from production for violation of Wal-Mart policies.

Documents found at the Tazreen factory by the Journal and additional documents photographed by labor groups showed that Tazreen filled orders to make Wal-Mart clothing several times this year, despite the fire-safety concerns found in previous inspections and Tazreen's deauthorization by NTD. A Sept. 13 Tazreen production summary, for example, showed about 60% of the 4,100 pieces of clothing made daily was for Wal-Mart.

Four suppliers for Wal-Mart worked with Tazreen this year, according to the documents. Two of the suppliers worked with the factory just months before the fire took place.

ENLARGE

Clothes are piled up at the Tazreen Fashions factory after last month's fire. A report in September said most of its work was for Wal-Mart.
Reuters

New York's International Intimates Inc. had plum-colored and black satin pajamas made at the factory, according to the documents. A Tazreen executive said the order was placed by International Intimates.

René Rofé, International Intimates' chief executive, said he only found out about his company's business with Tazreen last week. Mr. Rofé said a Hong Kong subcontractor sent the order to Tazreen without his permission. "We never knowingly placed an order with Tazreen," he said. He said his company is still a Wal-Mart vendor.

Faisal Textile Resources, a Bangladesh buyer, steered a large order of sand-colored Wal-Mart shorts to Tazreen on Nov. 1, according to a document reviewed by the Journal. Faisal owner Kamal Hossain declined to comment.

Supplier Success Apparel LLC, which is based in New York, had shorts made for Wal-Mart at the factory. Some were placed at Tazreen through a subcontractor.

"Success was neither aware nor in any way has authorized the production of our garments in the factory where this tragedy occurred," the company said. "This factory is not on our matrix and we have never done business with them."

Success said a subcontractor placed a small portion of Success's order with Tuba Group, which gave the fabric to Tazreen. A Bangladesh representative for Success learned of the unauthorized subcontracting on Nov. 8 and demanded an end to the work there, Success said. "Records indicate fabric and trims were returned from November 12 through November 18," the company said.

But a quality-control report found at the factory for what appeared to be Faded Glory shorts dated Nov. 22, two days before the fire, listed the buyer as Success Apparel. Success declined to comment on that report.

This March, children's-wear supplier Topson Downs of California Inc. also used Tazreen for Wal-Mart orders, according to documents reviewed by the Journal. Topson Downs said on its website that it monitored "nearly 100%" of the factories it uses, either through its in-house team, or using UL's STR unit.

UL has said that the firm had made four assessments for Topson Downs in Bangladesh this year but none of them at Tazreen. Topson Downs's social-compliance director didn't respond to requests for comment.

Mikhail Shiper, a secretary in Bangladesh's Ministry of Labour and Employment, said the government was reviewing labor-safety rules following the fire and would make sure that factories that didn't meet labor laws and safety standards would be shut down. "The Tazreen fire is a wake-up call," he said.

In the past, the government had been reluctant to push for safety improvements because of the political clout of the garment industry, according to industry analysts. More than two dozen garment-factory owners are members of Bangladesh's Parliament.

—Erica Orden in Los Angeles and Shelly Banjo in Dallas contributed to this article.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.